How the right home loan can help you outsmart the Banks

One minute you’re cheerfully walking along with money in your pocket and a smile on your face and the next, you’re a few hundred dollars lighter and left with a sense of fear and uncertainty. Well, this is exactly what it’s like for homeowners when the big banks decide to hike up mortgage rates and the worst thing is we stick by them!

The banks, of course, will claim they are simply passing on the cost of the new regulatory changes APRA recently imposed on them, as they will soon be required to hold more capital against mortgages to cushion for potential losses in the event that property prices drop or a GFC II. The rules don’t come into effect until July 2016, but we all know that if it means less profit for the banks they’ve got to make up for the shortfall somewhere, right?

Westpac was the first to blink, adding 0.20 percentage points to each of its variable home loan rates a couple of weeks ago, and from that small increase it’s expected they’ll rake in an extra $300 million a year in interest income. All of the other majors shortly followed Westpac with their own increases of between 0.15% and 0.18%.

“We’re outraged, of course, but it’s just too hard to refinance,” we all say. No it’s not, it really isn’t and that’s where we come in.

Our team have done all the research for you, and collectively have thousands of hours of real life experience in aligning our clients goals and behaviour with home loan products. Our experience has taught us that there are two key drivers you need working for you to get a great outcome with your home loan.

The first is minimising what you pay in interest, fees and charges for the life of the loan and the second is your behaviour.

To reduce what you pay in interest, fees and charges we need to hone in on the comparison rate. The comparison rate is the one that includes all interest, fees and charges that you will be charged over the life of the loan and it’s different to the super sharp one that you see advertised. It’s no good getting a fantastic honeymoon rate of 4.09% if it means that on average you are paying 5.19% for the following 29 years! We see it as our role to secure you a competitive rate for years 1, 2, 3, 4 and beyond.

Over the last few months we have consistently been able to deliver fantastic home loan discounts to our clients, that in many cases are more than 1.3% cheaper than the majors banks standard variable home loan. One of our partners even offers the waiver of all annual fees for the life of the loan and what that means is that the advertised rate and the comparison rate are effectively the same.

We think that’s a fantastic saving, but it can be even better with the ‘the Evalesco Effect’.

That is where your behaviour comes in, as the Evalesco Effect is a unique, holistic way of looking at your finances, and will allow you to structure your banking to suit your short term needs around day to day spending, emergencies and holidays whilst putting some money aside for the long term as well.

The Evalesco Effect will allow you to reach your full financial potential and allow you to properly align your pay cycle with your goals, priorities and dreams. Our next blog will cover the Evalesco Effect in more detail, and how a simple 360-degree mortgage solution can completely revitalise your finances. For now, though, it’s time to take a stand, ditch the big four and take a different road on your financial journey.

After all, why would you keep walking down the same road if you know there’s a good chance that you’re going to get mugged?

Take This Short Survey To Help Find Out If You Could Save On Your Mortgage

  • Have you changed your home loan provider in last 5 years?*
    • Yes
    • No
  • Do you place your salary into your home loan?*
    • Yes
    • No
  • Have you reviewed your home loan in last 2 years?*
    • Yes
    • No

It’s my job to work as my client’s financial ‘lifesaver’ to ensure that they swim between the flags and that they don’t get in over their heads.